Red Hat's 1 Billion Reasons to Love Linux

June 29, 2011

By
Sean Kerner

On the Linux Planet, free and open source software makes the world go around, while in the wider world, it's often money. There is one Linux vendor that stands head and shoulders above all others when it comes to money. This past week, Red Hat reiterated its commitment and path to be the first Linux vendor to make $1 billion in revenue in one year.

1. Red Hat Earnings

No, money isn't the most important thing on the Linux Planet, but it sure does help to keep score. This past week Red Hat reported its first-quarter fiscal 2012 revenue at $264.7 million for a 26 percent year-over-year increase.

Going a step further, Red Hat (NYSE: RHT) is so optimistic about its prospects that it raised its full-year guidance to a range of $1.07 billion to $1.085 billion, up from a previous forecast of $1.05 to $1.07 billion.

That's a lot of money made from free software. Approximately 85 percent of Red Hat's revenue comes from subscriptions to its Linux and JBoss middleware platform solutions. The remainder is training related revenue.

Red Hat has been boasting since last year that it would be the first pure play open source vendor to hit $1 billion in revenue. It now appears it has done so, with at least $70 million to spare.

What's interesting to note about Red Hat's quest for billions is that it's all about software and does not include a hardware component, as opposed to, say, a vendor like IBM. The $1 billion mark will be a watershed for the Linux industry, and it comes 20 years after Linus Torvalds first introduced the world to his hobby project.

2. Red Hat MRG 2.0

Red Hat makes its money from software, and one key software platform was updated this past week with the MRG 2.0 release. MRG, stands for Messaging, Real-Time and Grid. It pre-dates the modern use of the term cloud, though it is now a critical part of Red Hat's cloud platform.

At the core of MRG 2.0 is an optimized real-time Linux kernel. Years ago, when MRG first got started, real-time was not part of the mainline Linux kernel, but it is now. Red Hat still sees a need and a market opportunity to provide an optimized real-time release that provides enhancements over the features already in the mainline kernel.

Real-Time is important for a number of industries that Red Hat serves including, financial services and the U.S. military. What a real-time system provides is a feature known as determinism. That is -- an action occurs within the same amount of time, every time. So let's say you were using Linux to build a missile control system (yeah, that's mission-critical), you'd want to be sure that every time you hit the button, your missile launches with the same timing and precision.

For financial services, the same is true. Having a trade occur within the same amount of time, every time is critical, since time is money after all.

3. Linux 3.0 Gets Faster

The march toward Linux 3.0 continued this past week with the fourth release candidate.

At this stage of the release cycle, things tend to calm down with the bulk of activity occurring in the driver update realm. Linus Torvalds did note that there have been some performance regressions in the new kernel.

That said, in a follow upposting, Torvalds commented that 3.0 will still be faster than the 2.6.39, "due to the other change made."

4. GNOME Foundation Moves Forward

After several leader-less months, the GNOME Foundation has announced it has a new executive director.

Karen Sandler takes over from Stormy Peters, who left earlier this year to take a job at Mozilla. Sandler previously worked as general counsel at the Software Freedom Law Center. Yes, that's the same people that sue, err defend, free and open source software against infringement.

In terms of Gnome's technical development, that's also moving forward. Last week GNOME 3.1.2 was released. Although this is not production-ready code that you should be running on your desktop, it's a development release that shows the future of GNOME, which at this point is all about stabilizing GNOME 3.

5. Sabayon Linux 6 Released.

Sabayon is not a billion-dollar Linux distribution; nor does it have any aspiration to be one. It is, however, one of the best Gentoo Linux derived distributions, built on a strong community base.

Sabayon offers the promise of Gentoo's customization and power, with an easier to use UI and installer. The 6.0 release includes native support for the next-generation Btrfs filesystem, and it is based on the Linux 2.6.39.1 kernel.

In terms of next-generation desktops, Sabayon has chosen not to use GNOME 3, instead offering users a choice of GNOME 2.32.2 and KDE 4.6.4.

"Because we do care about our community, we do listen to our users, we consider them part of the game, we decided to leave GNOME3 out for another, last, release cycle, in order let things to settle down: providing a broken user experience has never been in our plans," Sabayon developers wrote in the 6.0 release announcement.

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